Dragons Den (and Shark Tank in the United States) is a television show where five wealthy venture capitalists are courted by entrepreneurs looking for an investment. Not surprisingly, many fantastic business lessons can be gained from these wealthy dragons.
And so, just as I have done with the Dog Whisperer and Barack Obama, among others, I now look to Kevin O’Leary, Jim Treliving, and the rest of the Dragons and Sharks for some key lessons that freelancers can learn and use.
Know Your Numbers
Far too often, the people pitching on Dragons Den don’t really have a firm grasp on their business. How much did you earn in revenue last year? What is your manufacturing cost? What is the average retail price? What is the size of your most recent order with the distributor?
You have to remember that you are running a business and not a hobby. As such, it is of utmost importance that you not only maintain accurate records of everything, but you also have a firm grasp on these numbers and what they mean. You should know how much you’re spending on marketing. You should know how much you earned last year, both in gross and net income. These figures are fundamental.
Know Your Market
If you build it, they will come… except that they won’t, unless it really is something that they want.
When you are growing your freelance business, it is important to understand who is your target demographic. You need to know who is your ideal client before you can go through the steps of trying to attract these clients. What does this market want? What is their typical budget? What value would you bring to the table? How do these clients typically operate?
Know Your Plan
Running your business by the seat of your pants simply isn’t the way to go. It may seem like a perfectly adequate strategy for a while, but it will come back to bite you in the long run. You need a plan. What are your goals for a year from now? Two years from now? Ten years from now? What are you going to do to get there?
Yes, given the volatility and the rate of change that we see in today’s economy, these plans will always be in a state of flux. You will need to roll with the punches and adapt as needed, but that doesn’t mean that you should neglect long term viability and long term planning. Have those plans in place, but be prepared to tweak them.
Know Your Place
There was one episode of Dragons Den a few weeks ago where the Dragons recounted some of their most memorable moments. In one of these, the Dragons were meeting with one of the business owners who had a successful pitch. The business owner was accompanied by his college professor. They were simply going over the final details of the investment offer.
During this meeting, the professor told the Dragons that the $100,000 investment (I believe that was the figure) “wasn’t a lot of money” to the Dragons and that they “probably spent that on a private jet” to get there. This severely upset Dragon Robert Herjavec, so much so that he got up, grabbed his cheque, ripped it up, and walked out of the room.
No, you don’t need to grovel at the feet of your investors or your customers, but you do need to treat them with a certain level of respect. The business owner practically had the money in hand, only to have the situation blow up in his face because of some inane comments by his professor. Respect yourself, to be sure, but respect your colleagues, customers, clients, and investors too.